Wills & Trusts
Comprehensive Estate Planning for Clients in Macomb, Oakland & St. Clair Counties, MI
Few people find it comfortable to contemplate the matter of wills, trusts, and other estate planning matters. However, without such planning, your family faces the prospect of having little clarity about your wishes or intentions should you become incapacitated or pass away. This can lead to confusion and disagreements among your heirs at a time when they are under stress. Such situations can lead to disputes during probate that can cause additional time, stress, and expense to resolve.
Avoiding all the above can be accomplished through professional estate planning. Your estate plan can consist of a simple last will and testament and medical Power of Attorney or can involve the use of trusts and financial planning that takes into account insurance policies, taxes, and even changes in property ownership. At Ziulkowski & Associates, our experienced team of estate planning lawyers can help you create a plan tailored to your circumstances that can give both you and your family peace of mind concerning the future.
Estate planning has three basic purposes and benefits:
- It transfers your assets upon your passing in the way you intend.
- It can avoid the delay and expense of probate proceedings.
- It can reduce your tax obligations.
All three of these factors must be addressed in designing your estate plan.
Many legal instruments and techniques can be used in your estate plan, as shown below.
This is the basic of all estate planning. A will accomplishes the first purpose of estate planning by permitting you to direct the disposition of assets upon your death. This avoids having your assets being passed on according to Michigan’s strict statutory scheme without any input from you.
A will also permits you to name a personal representative to handle the administration of your affairs after your death. If you have minor children at the time of your death, a will may be used to name a guardian or conservator to provide for your child’s care and support. A testamentary trust may also be established through the will to hold assets for your minor children until the time you have designated for distribution to them (usually upon them reaching a certain age).
Although a will may serve as an effective means of distributing your assets, a will normally does not affect the tax consequences to your estate. Assets distributed under a will must go through probate court and, as you may be aware, probate court proceedings will result in additional costs and delays in the administration and distribution of your estate.
A revocable trust addresses all three purposes of estate planning. Your assets are distributed as you have directed in a prompt, confidential manner. All assets in the trust are administered and distributed without the necessity of probate court proceedings. The trust may also be designed to make full use of federal and state tax laws so that you and your spouse may transfer the maximum amount of assets to your heirs free of estate taxes.
A revocable trust may be set up during your lifetime and permit you to remain in full control of your assets and to serve as your own trustee. You also retain the right to change or terminate the trust at any time during your life. A successor trustee is commonly named in the trust (often your spouse or an adult child) to assume the responsibility of handling your assets according to its terms after your death.
A trust is normally prepared with a will to provide that any assets not placed in the trust before your death will be transferred into the trust at the time of your death. Federal law exempts up to a certain amount in assets from estate taxes for individuals or married couples. Each person is entitled to the estate tax exemption. Revocable trusts are often created so that the tax credits of a married couple are used to maximize the distribution of assets to your children upon the death of the last surviving spouse.
Irrevocable trusts are trusts used to supplement your other estate planning documents and are created to hold specific assets for the benefit of named beneficiaries. Unlike revocable trusts, you must appoint a trustee other than yourself to control the assets placed in the trust. Irrevocable trusts are commonly used to hold life insurance policies to prevent your proceeds from being included in your estate for federal estate tax purposes.
Irrevocable trusts may also be used to protect assets from taxes in estates exceeding the estate tax credit limitation.
Another way to reduce your taxable estate is through the use of gifts. Each person is entitled to an annual gift tax exclusion for gifts up to $14,000 to as many recipients as desired. The annual exclusion amount of $14,000 is adjusted periodically for inflation. You may also consider gifts greater than the exemption amount to permit the future appreciation of an asset to accrue in your heir’s estate, rather than your estate.
General Durable Power of Attorney
A General Durable Power of Attorney is a document that permits you to name another person to handle your personal and financial affairs in the event you are unable to do so, particularly as a result of a disability. The General Durable Power of Attorney is often incorporated into the estate plan to ensure that the person you designate may fully handle your affairs without the necessity of seeking authorization from the probate court.
Medical Durable Power of Attorney
A Medical Durable Power of Attorney is a document that sets forth instructions concerning medical care after you become incapacitated or terminally ill. Under Michigan law, you may designate another person to make health care decisions for you when you are no longer physically or mentally capable of making those decisions.
The Patient Advocate Designation permits you to state your intentions concerning medical treatment in the event you are terminally ill and may no longer desire the use of artificial life support to prolong your life. It also permits you to name the person you would prefer to make those serious medical decisions on your behalf.
Medicaid & Health Care Planning
Medicaid, also known as the Medical Assistance Program, is a federal and state-funded program that pays for health care services for qualified persons who have limited assets and income. Although recent changes in the Medicaid laws have restricted many of the techniques available for Medicaid qualifications, careful planning may assist you in maintaining financial eligibility requirements for Medicaid to pay for long-term nursing care without exhausting all your assets.
Probate is the court process by which a person is appointed to distribute your assets after your death either according to a valid will or, in the case of no will, according to Michigan’s intestacy statutes.
The personal representative has the following duties:
- Choosing the proper probate proceeding (i.e. formal or informal, supervised or unsupervised) and filing the paperwork to get the process started
- Identifying assets of the probate estate
- Identifying the heirs and/or beneficiaries of the deceased’s estate, either by will or by applicable law
- Identifying all other interested parties
- Settling valid debts of the deceased and denying invalid creditor’s claims
- Distributing the remaining assets to the proper heirs and/or beneficiaries
- Supplying the court and interested parties with notice of the court proceedings, an inventory of the assets, an accounting of the estate’s income and expenses, and ultimately distribution of the assets
The duties of the personal representative and the degree of court involvement will vary based on the type of probate court proceeding chosen by the personal representative.
The appropriate probate court proceeding will depend on various factors. These can include the degree of harmony or discord among the decedent’s heirs/beneficiaries, the value of the assets in the probate estate, and whether the decedent died with or without a valid will.
Estate plans are developed around your unique needs, goals, and circumstances. They are designed to protect your legacy, provide clarity to your family and beneficiaries, and give everyone peace of mind knowing that important decisions about how to handle financial, health, and other family matters upon your incapacity or death are resolved.
At Ziulkowski & Associates, we can help inform and advise you on the legal instruments that apply to your circumstances and help you create a customized plan to suit your needs and objectives.
Book your complimentary consultation with our Clinton Township wills and trusts lawyers today.
They are true professionals and sincerely care about their clients.Shantaina S.